Choosing a boutique firm as one path into management consulting is a popular choice. While boutique consulting firm appear to operate like McKinsey and BCG, and may even be led by ex-partners, there business models typical mean they create overwhelmingly different experiences for their consultants.
After leaving the Firm, I led a very large boutique with over 150 employees. These observations are based on that experience and that of every colleague I have seen who went on to start either a 1-man practice or lead a firm around 20-30 people in size. Irrespective of the size, and the token positive picture they try to paint, they all eventually face the same problems, and soon close up shop or branch out into other areas to create revenue.
This podcast will explain the following difference you will need to consider when joining a boutique:
• What value is there to having a miniature version of McKinsey or BCG when the full-scale version does quite well in serving larger, complex companies? If boutiques exist since they serve smaller companies, what value would you get from that experience versus serving larger and more complex companies?
• The 4 things owners of boutique firms must do every day or they will soon die: gaining clients, delivering engagements, developing intellectual property and developing people. These are hard to do. You need to be machine to accomplish this on a scaled basis.
• The inherent challenges of a business model where partners essentially go to retire, though few will admit this, and may be unwilling and or unable to maintain the culture of learning and growth which epitomizes McKinsey and BCG.
• How do you grow and learn if the partners above you will likely not be retiring anytime soon or may not have a culture of passing ownership to a new generation of consultants?
• The challenges of being objective when a handful of clients generate 80% of revenue and their need to be kept happy all the time.
• The problems firms have in managing boom and bust cycles and what this mean for your work hours during such cycles.
• The economic problems boutiques have in managing out poor performers when the cost of firing is less than the cost to find and train a replacement. Essentially, it leads to depressed wages and unhappy consultants.
• The challenges senior members of the team face when the senior partners may be unwilling to step down or hand over client relationships.
• In a nutshell, what is the end-game for you in an entity where ownership, or the partnership ethos, will always be controlled by one or two people, because they generate the most revenue, when revenue generation should not be the ultimate objective?
That is the question you need to answer, and be comfortable with the answer.